What to do about the Triple Lock
What to do about the Triple Lock?
-
The State Pension is increased each year by the Triple Lock, which is either by inflation (CPI), the rise in average earnings, or 2.5% - whichever of the three is highest. For example, for 2019 the State Pension was increased by 3.9%.
-
Critics of the Triple Lock argue that the policy perpetuates growing inter-generational inequality of wealth and that as the country’s demographics change, the policy will become increasingly unaffordable.
-
If the Triple Lock were to continue moving forwards into 2021 & 2022 in its current form, the State Pension would increase by a minimum of 2.5% for 2021 and if the forecast from the OBR for wage growth figures are accurate by 18.3% for 2022. The cumulative rise over two years would be 21.3%.
-
This would a substantial increase for those already in receipt of the State Pension, but also for younger generations, who will benefit from the growth of the State Pension over the longer term.
-
It has been suggested that the Triple Lock could be replaced by the ‘Double Lock’ with the removal of the rise in average earnings and be linked to either Inflation or 2.5%. The re-introduction of the Triple Lock could then be considered at a later date depending on the type of economic recovery and perhaps cynically – the proximity of the next election.